Now Is The Time To Take More Care Over Car Finance Options

Friday, 5. December 2008

One of the biggest problems with running a car either privately or through a business is being able to predict the true ‘whole life’ cost in order to select the most appropriate way to fund the car. Few of us actually enjoy playing with figures so we tend to concentrate on the car itself (much more exciting) and relying upon advice from friends rather than doing the calculations to work out the most economical way to drive a car. I am currently writing a follow on book to my existing book, An Insider Guide To Car Finance, in which I have already identified 40 ways to finance a car. So it isn’t surprising that I believe around 80% of drivers fund their cars incorrectly and could save a fortune by simply looking at their method of finance. Unfortunately, when making comparisons much depends upon estimates of the future value of the car you intend to buy. For example if you were to buy a new £17,000 Renault Scenic and ran it for 3 years what would be the estimated value with just average mileage recorded? When surveyed I had estimates of £7,000 to £10,000 when in fact What Car estimate that the car would only be worth £4,420. This of course makes a huge difference to the calculations if you are comparing a purchase scheme to a lease scheme and could lead to the wrong conclusion. So in these very difficult times you need to consider your options very carefully and make sure that the figures you are using are as accurate as you can make them. A good broker should be able to assist with this decision in an impartial way. By Graham Hill